Continuing the conversation… talking about the successive waves of craziness sweeping through the market these days and how whenever the market reaches a new all-time high, there’s always another one waiting in the wings to blow it out of the water. In other words: the crazy market just keeps getting crazier.
The market is off the charts and off the rails and it’s getting harder to keep up with all the changes that are driving values and transforming the real estate process. For those feeling a bit unhinged by it all, here’s a quickie guide to real estate’s new normal.
Record Prices: We’re shedding record highs with impunity. March’s median price took another quantum leap. Here are the 2022 median numbers: January $1,250,000. February $1,380,000. March $1,612,000! Compare those with 2021s: January $1,100,000. February $1,060,000. March $1,100,000. And 2020s: January $870,000. February $898,000. March $925,000.
Revised Contract: We’ve had a Seller’s Market for so long that the standard residential purchase contract has been rewritten to reflect all the ways both subtle and overt, that Sellers control the offer process now that multiple-offers are the rule rather than the exception.
All-Cash: We’ve seen growing numbers of all-cash offers since 2015 but these days, buyers without cash don’t stand much of a chance of competing successfully in multiple-offer scenarios.
Pre-Emptive Offers: Wildly high offers that try to pre-empt scheduled offer dates and protocols are becoming the norm. Buyers try to dissuade Sellers from wanting and waiting to see what the multiple-offer process will bring them, by offering more than they were expecting right up front.
Disappearing Multiple Counter-Offers: Issuing multiple-counter offers to more than one competing buyer used to be a “thing”. These days it’s more common for Sellers to skip this step and simply accept an offer from a Buyer who gave it their highest and best shot with their initial offer.
No Loan or Appraisal Contingencies: Waiving one or both of these contingencies is becoming the norm with most offers as buyers try to find ways to compete with the preponderance of all-cash offers.
No Inspection Contingencies: Increasingly, Buyers are waiving any contingencies that allow for further investigation of a property right up front. They are simply signing off on whatever information Sellers have provided in their initial disclosure packages.
% Over List: The list price of a home is now just the starting price. The average home in Santa Cruz sold for 10% over list price last month. Properties are routinely selling for 20-30% over list.
Next Week: How High Can Prices Go